We reviewed Appendix A of your response letter dated August 24, 2011. Please tell us whether or not the revenue recognition and other errors impacted periods prior to January 1, 2007, including but not limited to 2006 and 2005. To the extent that you believe you had no errors in periods prior to January 1, 2007, please explain to us in detail how you reached this conclusion. Please also show us the disclosures you intend to provide in the financial statement footnotes to your 2009 Form 20-F/A reconciling the opening U.S. GAAP balances for each component of shareholders’ equity as of January 1, 2007 from the “as originally reported” amount to the “as restated” amount, in a manner similar to what you present as of December 31, 2007 on page A-19 of your August 24, 2011 response. As a related matter, to the extent you have determined that your financial statements for 2006 and/or 2005 should be restated, please show us how you will revise your selected financial data table on pages four

The Company respectfully advises the Staff that it had performed a careful analysis of possible errors arising from revenue recognition with respect to the balance sheet at January 1, 2007 and for purposes of presentation of the unaudited summary and selected financial data for 2006 and 2005. The Company reprocessed data on a contract-by-contract basis and concluded that the effect as at January 1, 2007 and as at and for the years ended December 31, 2006 and 2005 was immaterial. The effects were material from January 1, 2007, due in part to Gafisa´s relatively low level of reported net income in 2007 in addition to our 40% acquisition of our investee Alphaville in January 2007 and the acquisition of Tenda in October 2008. The more significant revenue recognition effects arose when we reprocessed the Alphaville and Tenda transactions on a contract-by-contract basis. The effects from reprocessing the Gafisa data on a contract-by-contract basis were immaterial in 2006 and 2005. The quantification of this reprocessing is provided supplementally in the attached Annex A. These effects will be reflected in “Item 3. Key Information—A. Selected Financial Data” in our Form 20-F. In addition to the 2006 and 2005 data, Annex A also presents the restated financial information to be disclosed for subsequent periods.

	As originally reported						As restated
Shareholders’ Equity	January 1, 2007			Restatement Adjustments			January 1, 2007
	(Unaudited)			(Unaudited)			(Unaudited)
Shareholders’ equity
Common shares, comprising 206,739,900 shares outstanding		583,305			–			583,305
Treasury shares		(43,571	)		–			(43,571	)
Appropriated retained earnings		177,180			(1,712	)		175,468
Unappropriated retained earnings		78,337			–			78,337
Total Gafisa shareholders’ equity		795,251			(1,712	)		793,539
Non-controlling interests		1,050			–			1,050
Total shareholders’ equity		796,301			(1,712	)		794,589

Cash And Cash Equivalents Marketable Securities	As Originally Reported		Restatement Adjustments (1)			As Restated
December 31, 2009	(Unaudited)		(Unaudited)			(Unaudited)
Cash and cash equivalents		1,348,403		(1,055,463	)		292,940
Marketable securities trading		–		1,005,882			1,005,882
Restricted cash		47,265		49,581			96,846
Total		1,395,668		–			1,395,668

December 31, 2008
Cash and cash equivalents		510,504		(326,980	)		183,524
Marketable securities trading		–		326,980			326,980
Restricted cash		76,928		–			76,928
Total		587,432		–			587,432

December 31, 2007
Cash and cash equivalents		512,185		(299,116	)		213,069
Marketable securities trading		–		299,116			299,116
Restricted cash		9,851		–			9,851
Total		522,036		–			522,036

ASC 350.20.40.10 (formerly EITF Issue 06-08 “Applicability of the Assessment of a Buyer’s Initial and Continuing Investment under FASB Statement No. 66 for Sales of Condominiums”) requires amounts potentially refundable to customers to be excluded from the initial and continuing investment test. The Company had previously not fully considered the contractual penalty/refund provisions on a unit by unit basis in applying U.S. GAAP revenue recognition for purposes of ASC 350.20.40.10.

Gafisa sales contracts provide for a penalty to be charged to the customer which is generally equivalent to 18% of sales prices (adjusted for inflation) to the extent Gafisa agrees to terminate the contract following default by the customer. After charging such penalties, should amounts previously paid by customers under a Gafisa contract be in excess of the penalty computation, then a refund of 60% of such remaining balance is provided to the Gafisa customer based on the terms of the contract. Gafisa has historically entered into commercial negotiations with customers and has been willing to concede higher levels of refunds in an attempt to avoid protracted court proceedings and regain clear title to its units so they can be sold timely. Gafisa’s negotiated repayments have historically approximated 35% of amounts previously paid.

Historically, our U.S. GAAP accounting practices for the Gafisa segment had not contemplated, on a contract-by-contract basis, the implication of the initial investment test and continuing investment test under U.S. GAAP as we did not consider the defaulting party had a right to reimbursement that would otherwise affect the revenue we had recognized as only Gafisa has the right to terminate the contract. Despite the fact that the Gafisa segment contracts do not provide the defaulting party with a right to cancel, upon further examination and based on an analysis of recent legal precedent, we have concluded that the defaulting party does have certain rights in law that can be exercised in the event a judicial appeal is filed. Judicial rulings have required companies in Brazil to return to defaulting parties, part of the deposit payments for units under development when the contract is terminated. Such amounts have approximated the percentage set forth in the sales contracts which determine the possibility of the Company granting a reimbursement at the Company´s discretion if it agrees to terminate the contract. The reimbursements paid by the Company of approximately 35% are an average percentage of amounts historically paid, therefore, there may be contracts in which this amount is higher or lower than the average of 35%. Accordingly, for purposes of our current U.S. GAAP accounting practices for the Gafisa segment we have used the contractual reimbursement percentage (after applying penalties) for purposes of determining the initial investment test. Upon recomputing the initial investment test and continuing investment test parameters on a contract-by-contract basis, rather than by developments, certain units were found to have failed the tests which resulted in the deferral of revenue recognition under the percentage of completion model. We have restated our consolidated financial statements as at December 31, 2009 and for each of the three years in the period then ended to reflect the deferral of recognition of revenue for the Gafisa segment.

Tenda’s pilot contracts provide for a refund to customers of 80% of the amounts previously paid during the construction period to the extent that default is agreed. Given that Tenda pilot contracts have potential refund provisions of 80% of amounts previously paid, those potentially refundable amounts are excluded from the initial investment test. When those amounts are excluded, a Tenda pilot customer would be required to make a substantial initial investment. Because low income home buyers do not make such large down payments, most Tenda pilot contracts will not meet the initial investment test and thus should be recognized using the deposit method of accounting.

Upon executing the Tenda Pilot program contract, the customer is required to provide a retainer of the real property value and pay the monthly installments to the real estate developer (the aggregate amount corresponds to approximately 5% - 15%) while its financing is pending approval by the bank. The bank customer financing varies from 85% to 95% of the real property value depending on the situation. Currently, to the extent that a customer is approved by a government bank, prior to the overall approval of specific project, the customer may be financed for 95% of the real property value.

Once the credit facility is approved by the government bank, Tenda, the customer and the bank enter into an agreement enforceable as a deed of promise to buy and sell, similar to a private credit facility agreement to develop a real estate venture, the final contract. Upon execution, the original Tenda Pilot program contract between Tenda and the customer is replaced, and the new agreement is transferred to the Bank of Brazil. From that time, the customer starts repaying the financing directly to the bank, which will pass the financing amounts on to Tenda over the construction period, as the construction work progresses.

Alphaville’s sales contracts provide for a refund to customers of 80% of the amounts previously paid during the infrastructure period to the extent that default is agreed. Given that the contracts have potential refund provisions of 80% of amounts previously paid, those potentially refundable amounts are excluded from the initial investment test. When those amounts are excluded, the customer would be required to make a substantial initial investment. Because middle and high end income customers may make large down payments, a large part of these contracts may meet the initial investment test. Alphaville’s negotiated repayments have historically approximated 76% of amounts previously paid.

	As originally reported															As restated
Net Income Reconciliation – BR and U.S. GAAP	2009			Gafisa Restatement Adjustments			Tenda Restatement Adjustments			Alphaville Restatement Adjustments			Total Restatement Adjustments			2009
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net income under Brazilian GAAP		213,540			–			–			–			–			213,540
Revenue recognition – net operating revenue		(477,072	)		–			–			–			–			(477,072	)
Revenue recognition – net operating revenue – initial test(1)		–			(77,776	)		60,627			(142,447	)		(159,596	)		(159,596	)
Revenue recognition – net operating revenue – continuing test(1)		–			(187,182	)		2,184			(36	)		(185,034	)		(185,034	)
Revenue recognition – operating costs		342,830			–			–			–			–			342,830
Revenue recognition – operating costs – initial test(1)		–			48,854			(61,863	)		78,373			65,364			65,364
Revenue recognition – operating costs – continuing test(1)		–			157,065			(2,228	)		20			154,857			154,857
Stock compensation (expense) reversal		7,194			–			–			–			–			7,194
Reversal of negative goodwill amortization of Redevco and Tenda		(178,508	)		–			–			–			–			(178,508	)
Business Combination of Tenda (2)		(3,173	)		(15,194	)		–			–			(15,194	)		(18,367	)
Tenda’s share issuance costs		11,072			–			–			–			–			11,072
Business Combination of Alphaville		(16,786	)		–			–			–			–			(16,786	)
Business Combination of Redevco		4,848			–			–			–			–			4,848
Reversal of contract termination provision (3)		–			–			13,826			–			13,826			13,826
Other		49			–			–			–			–			49
Reversal and revision of non–controlling interest (4)		36,188			30,178			–			–			30,178			66,366
Deferred income tax on adjustments above (5)		23,140			18,016			(475	)		8,229			25,770			48,910
Net income (loss) attributable to Gafisa, net of non–controlling interest		(36,678	)		(26,039	)		12,071			(55,861	)		(69,829	)		(106,507	)
Net income (loss) attributable to non-controlling interests under USGAAP (6)		42,276			(20,273	)		8,365			–			(11,908	)		30,368
Total net income (loss) under U.S. GAAP		5,598			(46,312	)		20,436			(55,861	)		(81,737	)		(76,139	)

(1)

(4)

Revision of non-controlling interest to financial expenses. The Company formed an unincorporated venture (SCP) in 2008 to hold interests in other real estate development companies. Upon further examination, this transaction was determined to be characteristic of a debt instrument rather than an equity investment. The results of the venture were originally presented as part of non-controlling interest amounts and were revised to financial expenses to reflect the Company´s current accounting practices. .

	As originally reported															As restated
Shareholders’ Equity Reconciliation BR and U.S. GAAP	2009			Gafisa Restatement Adjustments			Tenda Restatement Adjustments			Alphaville Restatement Adjustments			Total Restatement Adjustments			2009
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Shareholders’ equity under Brazilian GAAP		2,325,634			–			–			–			–			2,325,634
Revenue recognition – net operating revenue		(821,707	)		–			–			–			–			(821,707	)
Revenue recognition – net operating revenue – initial test(1)		–			(127,599	)		66,534			(249,437	)		(355,503	)		(355,503	)
Revenue recognition – net operating revenue – continuing test(1)		–			(252,630	)		2,346			(2,235	)		(252,518	)		(252,518	)
Revenue recognition – operating costs		560,157			–			–			–			–			560,157
Revenue recognition – operating costs – initial test(1)		–			116,841			(59,761	)		149,644			206,724			206,724
Revenue recognition – operating costs – continuing test(1)		–			194,432			(2,170	)		1,334			193,596			193,596
Capitalized interest		99,897			–			–			–			–			99,897
Amortization of capitalized interest		(94,126	)		–			–			–			–			(94,126	)
Liability – classified stock options		(3,939	)		–			–			–			–			(3,939	)
Receivables from clients – SFAS 140		11,410			–			–			–			–			11,410
Liability assumed – SFAS 140		(11,410	)		–			–			–			–			(11,410	)
Reversal of goodwill amortization of Alphaville		18,234			–			–			–			–			18,234
Reversal of negative goodwill amortization of Redevco and Tenda		(232,327	)		–			–			–			–			(232,327	)
Gain on the transfer of FIT Residencial		205,527						–			–			–			205,527
Business Combination of Tenda (2)		13,231			(17,974	)		–			–			(17,974	)		(4,743	)
Business Combination of Alphaville		(38,888	)					–			–			–			(38,888	)
Business Combination of Redevco		4,848						–			–			–			4,848
Reversal of contract termination provision (3)		–						25,023			–			25,023			25,023
Other		(538	)					–			–			–			(538	)
Reversal and revision of non – controlling interest (4)		56,425			64,209			–			–			64,209			120,634
Deferred income tax on adjustments above (5)		72,827			34,557			(9,291	)		11,695			36,961			109,788
Shareholders’ equity before non – controlling interest		2,165,255			(33,164	)		22,681			(88,999	)		(99,482	)		2,065,773
Non-controlling interests under USGAAP (6)		47,912			(53,446	)		8,365			13,256			(31,825	)		16,087
Total Shareholders’ equity under USGAAP		2,213,167			(86,610	)		31,046			(75,743	)		(131,307	)		2,081,860

(1)

(4)

results of the venture were originally presented as part of non-controlling interest amounts and were revised to financial expenses to reflect the Company´s current accounting practices.

	As originally reported					As restated
Assets	2009		Restatement Adjustments			2009
	(Unaudited)		(Unaudited)			(Unaudited)
Assets
Current assets
Cash and cash equivalents(1)		1,348,403		(1,055,463	)		292,940
Marketable securities(1)		–		1,005,882			1,005,882
Restricted cash(1)		47,265		49,581			96,846
Receivables from clients(2)		1,188,662		(2,366	)		1,186,296
Properties for sale (2)		1,796,000		400,320			2,196,320
Other accounts receivable		87,502		–			87,502
Prepaid expenses		14,122		–			14,122
Investments (3)		185,364		(31,825	)		153,539
Property and equipment, net		58,969		–			58,969
Intangibles, net (4)		151,343		(17,974	)		133,369
Goodwill		31,416		–			31,416
Receivables from clients(2)		1,691,642		(357,099	)		1,334,543
Properties for sale		416,083		–			416,083
Deferred income tax (5)		15,912		36,961			52,873
Other		96,647		–			96,647
Total assets		7,129,330		28,017			7,157,347

	As originally reported					As restated
Liabilities And Shareholders’ Equity	2009		Restatement Adjustments			2009
	(Unaudited)		(Unaudited)			(Unaudited)
Liabilities and shareholders’ equity
Current liabilities
Short-term debt, including current portion of long-term debt		653,070		–			653,070
Debentures		132,077		–			132,077
Obligations for purchase of land		241,396		–			241,396
Materials and services suppliers		169,085		–			169,085
Taxes and labor contributions		199,472		–			199,472
Advances from clients–real estate and services (2)		349,483		159,324			508,807
Credit assignments		118,846		–			118,846
Acquisition of investments		21,090		–			21,090
Dividends payable		50,716		–			50,716
Others		81,863		–			81,863
Long-term liabilities
Loans, net of current portion		476,645		–			476,645
Debentures, net of current portion		1,796,000		–			1,796,000
Deferred income tax		–		–			–
Obligations for purchase of land		141,563		–			141,563
Others		484,857		–			484,857
Shareholders’ equity
Total Gafisa shareholders’ equity		2,165,255		(99,482	)		2,065,773
Non-controlling interests(6)		47,912		(31,825	)		16,087
Total shareholders’ equity		2,213,167		(131,307	)		2,081,860
Total liabilities and shareholders’ equity		7,129,330		28,017			7,157,347

(2)

	As originally reported						As restated
Shareholders’ Equity	2009			Restatement Adjustments			2009
	(Unaudited)			(Unaudited)			(Unaudited)
Shareholders’ equity
Common shares, comprising 333,554,788 shares outstanding		1,586,184			–			1,586,184
Treasury shares		(1,731	)		–			(1,731	)
Appropriated retained earnings		580,802			(99,482	)		481,320
Unappropriated retained earnings		–			–			–
Total Gafisa shareholders’ equity		2,165,255			(99,482	)		2,065,773
Non-controlling interests		47,912			(31,825	)		16,087
Total shareholders’ equity		2,213,167			(131,307	)		2,081,860

	As originally reported						As restated
Net Income	2009			Restatement Adjustments			2009
Net operating revenue (1)		2,338,311			(339,960	)		1,998,351
Operating costs (sales and services) (1)		(1,652,850	)		220,221			(1,432,629	)
Gross profit (1)		685,461			(119,739	)		565,722
Operating expenses
Selling, general and administrative		(439,459	)		–			(439,459	)
Other (2)		(161,077	)		14,984			(146,093	)
Operating income		84,925			(104,755	)		(19,830	)
Financial income (expenses)(3)		(83,622	)		(21,022	)		(104,644	)
Income (loss) before income tax, equity in results and non-controlling interest		1,303			(125,777	)		(124,474	)
Income tax expense (4)		(59,567	)		25,770			(33,797	)
Income (loss) before equity in results and non-controlling interests		(58,264	)		(100,007	)		(158,271	)
Equity in results (5)		63,862			18,270			82,132
Net income (loss)		5,598			(81,737	)		(76,139	)
Less: attributable to non-controlling interests (6)		(42,276	)		11,908			(30,368	)
Net income (loss) attributable to Gafisa		(36,678	)		(69,829	)		(106,507	)

(1)

Revenue recognition – correction of error to fully take account of the revenue recognition provisions established by ASC 350.20.40.10. Amounts as originally reported had not taken full account of the rights of reimbursement of customers (which had the effect of deferring revenue recognition under the percentage-of-completion method until such time as the initial and continuing investments thresholds were met) and the reprocessing of the agreements on a unit-by-unit basis using the current interpretation and Reversal of Tenda’s contract termination provision which had historically been recorded as a means of deferring revenue and which was found to be insufficient and replaced by the current revenue recognition deferral adjustment above.

(3)

	As originally reported															As restated
Net Income Reconciliation – BR and U.S. GAAP	2008			Gafisa Restatement Adjustments			Tenda Restatement Adjustments			Alphaville Restatement Adjustments			Total Restatement Adjustments			2008
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net income under Brazilian GAAP		109,921			–			–			–			–			109,921
Revenue recognition–net operating revenue		85,337			–			–			–			–			85,337
Revenue recognition – net operating revenue – initial test(1)		–			(55,366	)		5,906			(42,025	)		(91,485	)		(91,485	)
Revenue recognition – net operating revenue – continuing test(1)		–			(65,448	)		163			–			(65,285	)		(65,285	)
Revenue recognition – operating costs		(47,672	)		–			–			–			–			(47,672	)
Revenue recognition – operating costs – initial test(1)		–			43,531			2,102			32,440			78,073			78,073
Revenue recognition – operating costs – continuing test(1)		–			37,367			58						37,425			37,425
Amortization of capitalized interest		(9,357	)		–			–			–			–			(9,357	)
Stock compensation (expense) reversal		53,819			–			–			–			–			53,819
Reversal of goodwill amortization of Alphaville		10,734			–			–			–			–			10,734
Reversal of negative goodwill amortization of Redevco and Tenda		(53,819	)		–			–			–			–			(53,819	)
Gain on the transfer of FIT Residencial		205,527			–			–			–			–			205,527
Business Combination of Tenda (2)		(468	)		(2,780	)		–			–			(2,780	)		(3,248	)
Business Combination of Alphaville		(19,185	)		–			–			–			–			(19,185	)
Fair value option of financial liabilities		(207	)		–			–			–			–			(207	)
Reversal of contract termination provision (3)		–			–			11,197			–			11,197			11,197
Other		(356	)		–			–			–			–			(356	)
Reversal and revision of non-controlling interest (4)		6,839			34,031			–			–			34,031			40,870
Deferred income tax on adjustments above (5)		(41,455	)		12,045			(8,816	)		546			3,775			(37,680	)
Net income (loss) attributable to Gafisa, net of non-controlling interest		299,658			3,380			10,610			(9,039	)		4,951			304,609
Net income (loss) attributable to non-controlling interests under USGAAP (6)		47,900			(34,031	)		–			3,616			(30,415	)		17,485
Total net income (loss) under USGAAP		347,558			(30,651	)		10,610			(5,423	)		(25,464	)		322,094

(1)

(4)

(a) Revision of non-controlling interest to financial expenses. The Company formed an unincorporated venture (SCP) in 2008 to hold interests in other real estate development companies. Upon further examination, this transaction was determined to be characteristic of a debt instrument rather than an equity investment. The results of the venture were originally presented as part of non-controlling interest amounts and were revised to financial expenses to reflect the Company´s current accounting practices;

	As originally reported															As restated
Shareholders’ Equity Reconciliation BR and U.S. GAAP	2008			Gafisa Restatement Adjustments			Tenda Restatement Adjustments			Alphaville Restatement Adjustments			Total Restatement Adjustments			2008
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Shareholders’ equity under Brazilian GAAP		1,612,419			–			–			–			–			1,612,419
Revenue recognition–net operating revenue		(344,635	)		–			–			–			–			(344,635	)
Revenue recognition – net operating revenue – initial test(1)		–			(94,823	)		5,906			(106,990	)		(195,907	)		(195,907	)
Revenue recognition – net operating revenue – continuing test(1)		–			(65,448	)		163			(2,199	)		(67,484	)		(67,484	)
Revenue recognition – operating costs		217,327			–			–			–			–			217,327
Revenue recognition – operating costs – initial test(1)		–			67,987			2,102			71,271			141,360			141,360
Revenue recognition – operating costs – continuing test(1)		–			37,367			58			1,314			38,739			38,739
Capitalized interest		99,897			–			–			–			–			99,897
Amortization of capitalized interest		(94,126	)		–			–			–			–			(94,126	)
Liability–classified stock options		(2,221	)		–			–			–			–			(2,221	)
Receivables from clients–SFAS 140		12,843			–			–			–			–			12,843
Liability assumed–SFAS 140		(12,843	)		–			–			–			–			(12,843	)
Reversal of goodwill amortization of Alphaville		18,234			–			–			–			–			18,234
Reversal of negative goodwill amortization of Redevco and Tenda		(53,819	)		–			–			–			–			(53,819	)
Gain on the transfer of FIT Residencial		205,527			–			–			–			–			205,527
Business Combination of Tenda (2)		16,404			(2,780	)		–			–			(2,780	)		13,624
Business Combination of Alphaville		(22,102	)		–			–			–			–			(22,102	)
Reversal of contract termination provision (3)		–			–			11,197			–			11,197			11,197
Other		266			–			–			–			–			266
Reversal and revision of non-controlling interest (4)		20,237			34,031			–			–			34,031			54,268
Deferred income tax on adjustments above (5)		49,687			16,541			(8,816	)		3,466			11,191			60,878
Shareholders’ equity before non—controlling interest		1,723,095			(7,125	)		10,610			(33,138	)		(29,653	)		1,693,442
Non-controlling interests under USGAAP (6)		451,342			(33,173	)		-			13,256			(19,917	)		431,425
Total Shareholders’ equity under USGAAP		2,174,437			(40,298	)		10,610			(19,882	)		(49,570	)		2,124,867

(1)

(4)

	As originally reported					As restated
Assets	2008		Restatement Adjustments			2008
	(Unaudited)		(Unaudited)			(Unaudited)
Assets
Current assets
Cash and cash equivalents (1)		510,504		(326,980	)		183,524
Marketable securities (1)		–		326,980			326,980
Restricted cash (1)		76,928		–			76,928
Receivables from clients (2)		1,060,845		(77,512	)		983,333
Properties for sale (2)		2,058,721		180,099			2,238,820
Other accounts receivable		127,150		–			127,150
Prepaid expenses		27,732		–			27,732
Investments (3)		49,135		(19,917	)		29,218
Property and equipment, net		50,852		–			50,852
Intangibles, net (4)		188,199		(2,780	)		185,419
Goodwill		31,416		–			31,416
Receivables from clients (2)		720,298		(52,629	)		667,669
Properties for sale		149,403		–			149,403
Deferred income tax (5)		35,067		11,191			46,258
Other		93,153		–			93,153
Total assets		5,179,403		38,452			5,217,855

	As originally reported					As restated
Liabilities And Shareholders’ Equity	2008		Restatement Adjustments			2008
	(Unaudited)		(Unaudited)			(Unaudited)
Liabilities and shareholders’ equity
Current liabilities
Short-term debt, including current portion of long-term debt		430,853		–			430,853
Debentures		64,930		–			64,930
Obligations for purchase of land		278,745		–			278,745
Materials and services suppliers		103,592		–			103,592
Taxes and labor contributions		112,729		–			112,729
Advances from clients–real estate and services (2)		176,958		88,022			264,980
Credit assignments		46,844		–			46,844
Acquisition of investments		25,296		–			25,296
Dividends payable		26,106		–			26,106
Others		85,445		–			85,445
Long-term liabilities
Loans, net of current portion		587,355		–			587,355
Debentures, net of current portion		442,000		–			442,000
Deferred income tax		–		–			–
Obligations for purchase of land		225,639		–			225,639
Others		398,474		–			398,474
Shareholders’ equity
Total Gafisa shareholders’ equity		1,723,095		(29,653	)		1,693,442
Non-controlling interests(6)		451,342		(19,917	)		431,425
Total shareholders’ equity		2,174,437		(49,570	)		2,124,867
Total liabilities and shareholders’ equity		5,179,403		38,452			5,217,855

(2)

	As originally reported						As restated
Shareholders’ Equity	2008			Restatement Adjustments			2008
	(Unaudited)			(Unaudited)			(Unaudited)
Shareholders’ equity
Common shares, comprising 259,925,092 shares outstanding		1,199,498			–			1,199,498
Treasury shares		(14,595	)		–			(14,595	)
Appropriated retained earnings		538,192			(29,653	)		508,539
Unappropriated retained earnings		–			–			–
Total Gafisa shareholders’ equity		1,723,095			(29,653	)		1,693,442
Non-controlling interests(6)		451,342			(19,917	)		431,425
Total shareholders’ equity		2,174,437			(49,570	)		2,124,867

	As originally reported						As restated
Net Income	2008			Restatement Adjustments			2008
	(Unaudited)			(Unaudited)			(Unaudited)
Net operating revenue (1)		1,692,706			(215,402	)		1,477,304
Operating costs (sales and services) (1)		(1,198,256	)		115,498			(1,082,758	)
Gross profit (1)		494,450			(99,904	)		394,546
Operating expenses
Selling, general and administrative		(306,134	)		–			(306,134	)
Other(2)		163,363			31,251			194,614
Operating income		351,679			(68,653	)		283,026
Financial income (expenses)(3)		40,198			35,798			75,996
Income (loss) before income tax, equity in results and non-controlling interest		391,877			(32,855	)		359,022
Income tax expense (4)		(70,576	)		3,775			(66,801	)
Income (loss) before equity in results and non-controlling interests		321,301			(29,080	)		292,221
Equity in results (5)		26,257			3,616			29,873
Net income (loss)		347,558			(25,464	)		322,099
Less: attributable to non-controlling interests (6)		(47,900	)		30,415			(17,485	)
Net income (loss) attributable to Gafisa		299,658			4,951			304,609

(1)

(3)

(a) Revision of non-controlling interest to financial expenses. The Company formed an unincorporated venture (SCP) in 2008to hold interests in other real estate development companies. Upon further examination, this transaction was determined to be characteristic of a debt instrument rather than an equity investment. The results of the venture were originally presented as part of non-controlling interest amounts and were revised to financial expenses to reflect the Company´s current accounting practices;

	As originally reported												As restated
Net Income Reconciliation – BR and U.S. GAAP	2007			Gafisa Restatement Adjustments			Alphaville Restatement Adjustments			Total Restatement Adjustments			2007
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net income under Brazilian GAAP		91,640			–			–			–			91,640
Revenue recognition–net operating revenue		(152,064	)		–			–			–			(152,064	)
Revenue recognition – net operating revenue – initial test(1)		–			(21,107	)		(64,965	)		(86,072	)		(86,072	)
Revenue recognition – net operating revenue – continuing test(1)		–			–			(2,199	)		(2,199	)		(2,199	)
Revenue recognition – operating costs		96,215			–			–			–			96,215
Revenue recognition – operating costs – initial test(1)		–			7,841			38,831			46,672			46,672
Revenue recognition – operating costs – continuing test(1)		–			–			1,314			1,314			1,314
Amortization of capitalized interest		(32,544	)		–			–			–			(32,544	)
Stock compensation (expense) reversal		22,684			–			–			–			22,684
Reversal of goodwill amortization of Alphaville		7,500			–			–			–			7,500
Business Combination of Alphaville		(2,917	)		–			–			–			(2,917	)
Fair value option of financial liabilities		207			–			–			–			207
Other		370			–			–			–			370
Reversal and revision of non-controlling interest		1,994			–			–			–			1,994
Deferred income tax on adjustments above (2)		30,377			4,473			2,920			7,393			37,770
Net income (loss) attributable to Gafisa, net of non-controlling interest		63,462			(8,793	)		(24,099	)		(32,892	)		30,570
Net income (loss) attributable to non-controlling interests under USGAAP(3)		4,738			858			9,640			10,498			15,236
Total net income (loss) under USGAAP		68,200			(7,935	)		(14,459	)		(22,394	)		45,806

(1)

	As originally reported												As restated
Shareholders’ Equity Reconciliation BR and U.S. GAAP	2007			Gafisa Restatement Adjustments			Alphaville Restatement Adjustments			Restatement Adjustments Total			2007
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Shareholders’ equity under Brazilian GAAP		1,498,728			–			–			–			1,498,728
Revenue recognition – net operating revenue		(185,034	)		–			–			–			(185,034	)
Revenue recognition – net operating revenue – initial test(1)		–			(39,457	)		(64,965	)		(104,422	)		(104,422	)
Revenue recognition – net operating revenue – continuing test(1)		–			–			(2,199	)		(2,199	)		(2,199	)

Revenue recognition – operating costs			121,212				–				–				–				121,212
Revenue recognition – operating costs – initial test(1)			–				24,456				38,831				63,287				63,287

	As originally reported												As restated
Shareholders’ Equity Reconciliation BR and U.S. GAAP	2007			Gafisa Restatement Adjustments			Alphaville Restatement Adjustments			Restatement Adjustments Total			2007
Revenue recognition – operating costs – continuing test(1)		–			–			1,314			1,314			1,314
Capitalized interest		99,897			–			–			–			99,897
Amortization of capitalized interest		(84,769	)		–			–			–			(84,769	)
Liability – classified stock options		(29,356	)		–			–			–			(29,356	)
Receivables from clients – SFAS 140		22,390			–			–			–			22,390
Liability assumed – SFAS 140		(22,390	)		–			–			–			(22,390	)
Reversal of goodwill amortization of Alphaville		7,500			–			–			–			7,500
Business Combination of Alphaville		(2,917	)		–			–			–			(2,917	)
Reversal of contract termination provision		207			–			–			–			207
Other		(339	)		–			–			–			(339	)
Reversal and revision of non-controlling interest		185			–			–			–			185
Deferred income tax on adjustments above (2)		16,556			4,496			2,920			7,416			23,972
Shareholders’ equity before non-controlling interest		1,441,870			(10,505	)		(24,099	)		(34,604	)		1,407,266
Non-controlling interests under USGAAP(3)		39,576			858			9,640			10,498			50,074
Total Shareholders’ equity under U.S.GAAP		1,481,446			(9,647	)		(14,459	)		(24,106	)		1,457,340

(1)

	As originally reported					As restated
Assets	2007		Restatement Adjustments			2007
	(Unaudited)		(Unaudited)			(Unaudited)
Assets
Current assets
Cash and cash equivalents (1)		512,185		(299,116	)		213,069
Marketable securities (1)		–		299,116			299,116
Restricted cash (1)		9,851		–			9,851
Receivables from clients (2)		269,363		(37,085	)		232,278
Properties for sale (2)		990,877		64,601			1,055,478
Other accounts receivable		101,279		–			101,279
Prepaid expenses		45,003		–			45,003
Investments (3)		46,249		10,498			56,747
Property and equipment, net		27,336		–			27,336
Intangibles, net		153,240		–			153,240
Goodwill		31,416		–			31,416
Other assets		–		–			–
Receivables from clients (2)		505,073		(69,536	)		435,537
Properties for sale		149,403		–			149,403
Deferred income tax (4)		–		7,416			7,416
Other		47,765		–			47,765
Total assets		2,889,040		(24,106	)		2,864,934

	As originally reported					As restated
Liabilities and Shareholders’ Equity	2007		Restatement Adjustments			2007
	(Unaudited)		(Unaudited)			(Unaudited)
Liabilities and shareholders’ equity Current liabilities
Current Liabilities
Short–term debt, including current portion of long–term debt		59,196		–			59,196
Debentures		9,190		–			9,190
Obligations for purchase of land		244,696		–			244,696
Materials and services suppliers		82,334		–			82,334
Taxes and labor contributions		60,996		–			60,996
Advances from clients – real estate and services		26,485		–			26,485
Credit assignments		1,442		–			1,442
Acquisition of investments		48,521		–			48,521
Dividends payable		26,981		–			26,981
Others		73,541		–			73,541
Long-term liabilities
Loans, net of current portion		378,138		–			378,138
Debentures, net of current portion		240,000		–			240,000
Deferred income tax		3,728		–			3,728
Obligations for purchase of land		73,056		–			73,056
Others		79,290		–			79,290
Shareholders’ equity
Total Gafisa shareholders’ equity		1,441,870		(34,604	)		1,407,266
Non-controlling interests(5)		39,576		10,498			50,074
Total shareholders’ equity		1,481,446		(24,106	)		1,457,340
Total liabilities and shareholders’ equity		2,889,040		(24,106	)		2,864,934

(2)

	As originally reported						As restated
Shareholders’ Equity	2007			Restatement Adjustments			2007
	(Unaudited)			(Unaudited)			(Unaudited)
Shareholders’ equity
Common shares, comprising 258,904,242 shares outstanding		1,191,827			–			1,191,827
Treasury shares		(14,595	)		–			(14,595	)
Appropriated retained earnings		182,861			(34,604	)		148,257
Unappropriated retained earnings		81,777			–			81,777
Total Gafisa shareholders’ equity		1,441,870			(34,604	)		1,407,266
Non-controlling interests(5)		39,576			10,498			50,074
Total shareholders’ equity		1,481,446			(24,106	)		1,457,340

A-18

	As originally reported						As restated
Net Income	2007			Restatement Adjustments			2007
	(Unaudited)			(Unaudited)			(Unaudited)
Net operating revenue(1)		1,090,632			(92,657	)		997,975
Operating costs (sales and services)(1)		(865,756	)		47,986			(817,770	)
Gross profit(1)		224,876			(44,671	)		180,205
Operating expenses
Selling, general and administrative		(192,025	)		–			(192,025	)
Other		1,595			–			1,595
Operating income		34,446			(44,671	)		(10,225	)
Financial income (expenses)(2)		27,243			4,386			31,629
Income (loss) before income tax, equity in results and non-controlling interest		61,689			(40,285	)		21,404
Income tax expense (3)		(1,988	)		7,393			5,405
Income (loss) before equity in results and non-controlling interests		59,701			(32,892	)		26,809
Equity in results (4)		8,499			10,498			18,997
Net income (loss)		68,200			(22,394	)		45,806
Less: attributable to non-controlling interests (5)		(4,738	)		(10,498	)		(15,236	)
Net income (loss) attributable to Gafisa		63,462			(32,892	)		30,570

(1)

	As originally reported									As restated
Net Income Reconciliation – BR and U.S. GAAP	2006			Gafisa Restatement Adjustments			Total Restatement Adjustments			2006
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net income under Brazilian GAAP		44,010			–			–			44,010
Revenue recognition–net operating revenue		(32,970	)		–			–			(32,970	)
Revenue recognition – net operating revenue – initial test(1)		–			(15,226	)		(15,226	)		(15,226	)
Revenue recognition – operating costs		24,997			–			–			24,997
Revenue recognition – operating costs – initial test(1)		–			15,291			15,291			15,291
Capitalized interest and amortization of capitalized interest		13,457			–			–			13,457
Stock compensation (expense) reversal		(25,248	)		–			–			(25,248	)
Other		573			–			–			573
Reversal and revision of non-controlling interest		1,873			–			–			1,873
Deferred income tax on adjustments above (2)		(1,865	)		(589	)		(589	)		(2,454	)
Net income (loss) attributable to Gafisa, net of non-controlling interest		24,827			(524	)		(524	)		24,303
Net income (loss) attributable to non-controlling interests under USGAAP(3)		1,125			–			–			1,125

Total net income (loss) under USGAAP

25,952

(524

)

(524

)

25,428

(1)

(2)

Deferred income tax on above adjustments.

(3)

Non-controlling interest on above adjustments.

	As originally reported									As restated
Shareholders’ Equity Reconciliation BR and U.S. GAAP	2006			Gafisa Restatement Adjustments			Restatement Adjustments Total			2006
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Shareholders’ equity under Brazilian GAAP		807,433			–			–			807,433
Revenue recognition – net operating revenue )		(32,970	)		–			–			(32,970	)
Revenue recognition – net operating revenue – initial test(1)		–			(18,350	)		(18,350	)		(18,350	)
Revenue recognition – operating costs		24,997			–			–			24,997
Revenue recognition – operating costs – initial test(1)		–			16,615			16,615			16,615
Capitalized interest		99,897			–			–			99,897
Amortization of capitalized interest		(52,225	)		–			–			(52,225	)
Liability – classified stock options		(34,220	)		–			–			(34,220	)
Receivables from clients – SFAS 140		19,402			–			–			19,402
Liability assumed – SFAS 140		(19,402	)		–			–			(19,402	)
Other		(31	)		–			–			(31	)
Reversal and revision of non-controlling interest		(3,809	)		–			–			(3,809	)
Deferred income tax on adjustments above (2)		(13,821	)		23			23			(13,798	)
Shareholders’ equity before non-controlling interest		795,251			(1,712	)		(1,712	)		795,539
Non-controlling interests under USGAAP(3)		1,050			-			-			1,050
Total Shareholders’ equity under U.S.GAAP		796,301			(1,712	)		(1,712	)		794,589

(1)

As originally

reported

As restated

Assets

2006

Restatement Adjustments

2006

(Unaudited)

Assets

Current assets

Cash and cash equivalents

260,919

–

260,919

Receivables from clients (1)

184,595

(18,350

)

166,245

Properties for sale (1)

419,998

16,615

436,613

Other accounts receivable

303,258

–

303,258

Prepaid expenses

33,750

–

33,750

Investments

53,804

–

53,804

Property and equipment, net

8,146

–

8,146

Intangibles, net

–

Goodwill

–

Other assets

–

Receivables from clients (1)

259,174

–

259,174

Properties for sale

63,413

–

63,413

Deferred income tax (2)

–

Other

46,829

–

46,829

Total assets

1,633,886

(1,735

)

1,632,151

	As originally reported					As restated
Liabilities and Shareholders’ Equity	2006		Restatement Adjustments			2006
	(Unaudited)		(Unaudited)			(Unaudited)
Liabilities and shareholders’ equity Current liabilities
Current Liabilities
Short–term debt, including current portion of long–term debt		17,202		–			17,202
Debentures		11,038		–			11,038
Obligations for purchase of land		106,213		–			106,213
Materials and services suppliers		24,680		–			24,680
Taxes and labor contributions		36,434		–			36,434
Advances from clients – real estate and services		3,938		–			3,938
Credit assignments		1,358		–			1,358
Acquisition of investments		–		–			–
Dividends payable		10,938		–			10,938
Others		202,368		–			202,368
Long-term liabilities
Loans, net of current portion		21,176		–			21,176
Debentures, net of current portion		240,000		–			240,000
Deferred income tax		828		(23	)		805
Obligations for purchase of land		98,398		–			98,398
Others		63,014		–			63,014
Shareholders’ equity
Total Gafisa shareholders’ equity		795,251		(1,712	)		793,539
Non-controlling interests(3)		1,050		–			1,050
Total shareholders’ equity		796,301		(1,712	)		794,589
Total liabilities and shareholders’ equity		1,633,886		(1,735	)		1,632,151

(1)

	As originally reported						As restated
Shareholders’ Equity	2006			Restatement Adjustments			2006
	(Unaudited)			(Unaudited)			(Unaudited)
Shareholders’ equity
Common shares, comprising 206,739,900 shares outstanding		583,305			–			583,305
Treasury shares		(43,571	)		–			(43,571	)
Appropriated retained earnings		177,180			(1,712	)		175,468
Unappropriated retained earnings		78,337			–			78,337
Total Gafisa shareholders’ equity		795,251			(1,712	)		793,539
Non-controlling interests		1,050			–			1,050
Total shareholders’ equity		796,301			(1,712	)		794,589

	As originally reported						As restated
Net Income	2006			Restatement Adjustments			2006
	(Unaudited)			(Unaudited)			(Unaudited)
Net operating revenue(1)		674,740			(15,226	)		659,514
Operating costs (sales and services)(1)		(503,172	)		15,291			(487,881	)
Gross profit(1)		171,568			65			171,633
Operating expenses
Selling, general and administrative		(139,053	)		–			(139,053	)
Other		(135	)		–			135
Operating income		32,3280			65			32,445
Financial income (expenses		4,022			-			4,022
Income (loss) before income tax, equity in results and non-controlling interest		36,402			65			36,467
Income tax expense (2)		(11,187	)		(589	)		(11,776	)
Income (loss) before equity in results and non-controlling interests		25,215			(524	)		24,691
Equity in results		894			-			894
Stock compensation expense related to cumulative effect of a change in accounting principles		(157	)
Net income (loss)		25,952			(524	)		25,428
Less: attributable to non-controlling interests (3)		(1,125	)		-			(1,125	)
Net income (loss) attributable to Gafisa		24,827			(524	)		24,303

(1)

	As originally reported									As restated
Net Income Reconciliation – BR and U.S. GAAP	2005			Gafisa Restatement Adjustments			Total Restatement Adjustments			2005
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net income under Brazilian GAAP		30,677			–			–			30,677
Revenue recognition – net operating revenue – initial test(1)		–			(3,125	)		(3,125	)		(3,125	)
Revenue recognition – operating costs – initial test(1)		–			1,324			1,324			1,324
Land barter transactions net operating revenue		31,624			–			–			31,624
Land barter transactions net operating costs		(31,624	)		–			–			(31,624	)
Discouting of receivables		(1,666	)		–			–			(1,666	)
Capitalized interest and amortization of capitalized interest		11,234			–			–			11,234
Stock issuance expenses		410			–			–			410
Stock compensation (expense) reversal		(3,455	)		–			–			(3,455	)
Other		354			–			–			354
Reversal and revision of non-controlling interest		113			–			–			113
Deferred income tax on adjustments above (2)		(3,284	)		612			612			(2,672	)

	As originally reported								As restated
Net Income Reconciliation – BR and U.S. GAAP	2005		Gafisa Restatement Adjustments			Total Restatement Adjustments			2005
	(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
Net income (loss) attributable to Gafisa, net of non-controlling interest		34,383		(1,189	)		(1,189	)		33,194
Net income (loss) attributable to non-controlling interests under USGAAP(3)		571		–			–			571
Total net income (loss) under USGAAP		34,954		(1,189	)		(1,189	)		33,765

(1)

	As originally reported									As restated
Shareholders’ Equity Reconciliation BR and U.S. GAAP	2005			Gafisa Restatement Adjustments			Restatement Adjustments Total			2005
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Shareholders’ equity under Brazilian GAAP		270,188			–			–			270,188
Revenue recognition – net operating revenue – initial test(1) )		–			(3,125	)		(3,125	)		(3,125	)
Revenue recognition – operating costs – initial test(1)		–			1,324			1,324			1,324
Land barter transactions net operating revenue		31,264			–			–			31,264
Land barter transactions net operating costs		(31,264	)		–			–			(31,264	)
Discounting of receivables		(3,080	)		–			–			(3,080	)
Stock issuance expenses		410			–			–			410
Capitalized interests		69,616			–			–			69,616
Amortization of capitalized interest		(35,391	)		–			–			(35,391	)
Receivables from clients – SFAS 140		8,757									8,757
Liability assumed – SFAS 140		(8,757	)		–			–			(8,757	)
Inventories – land barter transactions		93,678			–			–			93,678
Liability assumed – land barter transactions		(93,678	)		–			–			(93,678	)
Other		(695	)		–			–			(695	)
Reversal and revision of non-controlling interest		176			–			–			176
Deferred income tax on adjustments above (2)		(10,620	)		612			612			(10,008	)
Shareholders’ equity before non-controlling interest		290,604			(1,189	)		(1,189	)		289,415
Non-controlling interests under USGAAP(3)		197			-			-			197
Total Shareholders’ equity under U.S.GAAP		290,801			(1,189	)		(1,189	)		289,612

(1)

	As originally reported					As restated
Assets	2005		Restatement Adjustments			2005
	(Unaudited)		(Unaudited)			(Unaudited)
Assets
Current assets
Cash and cash equivalents		136,153		–			136,153
Receivables from clients (1)		127,641		(3,125	)		124,516
Properties for sale (1)		343,252		1,324			344,576
Other accounts receivable		96,062		–			96,062
Prepaid expenses		9,401		–			9,401
Investments		30,118		–			30,118
Property and equipment, net		10,256		–			10,256
Receivables from clients (1)		109,437		–			109,437
Properties for sale		33,361		–			33,361
Deferred income tax (2)		5,104		612			5,716
Other		602		–			602
Total assets		901,387		(1,189	)		900,198

	As originally reported					As restated
Liabilities and Shareholders’ Equity	2005		Restatement Adjustments			2005
	(Unaudited)		(Unaudited)			(Unaudited)
Liabilities and shareholders’ equity Current liabilities
Current Liabilities
Short–term debt, including current portion of long–term debt		25,728		–			25,728
Debentures		6,118		–			6,118
Obligations for purchase of land		25,439		–			25,439
Materials and services suppliers		22,823		–			22,823
Taxes and labor contributions		40,051		–			40,051
Advances from clients – real estate and services		19,985		–			19,985
Credit assignments		1,363		–			1,363
Others		97,208		–			97,208
Long-term liabilities
Loans, net of current portion		85,993		–			85,993
Debentures, net of current portion		176,310		–			176,310
Deferred income tax		–		–			–
Obligations for purchase of land		98,729		–			98,729
Others		10,839		–			10,839
Shareholders’ equity
Total Gafisa shareholders’ equity		290,604		(1,189	)		289,415
Non-controlling interests(3)		197		–			197
Total shareholders’ equity		290,801		(1,189	)		289,612
Total liabilities and shareholders’ equity		901,387		(1,189	)		900,198

(1)

	As originally reported						As restated
Shareholders’ Equity	2005			Restatement Adjustments			2005
	(Unaudited)			(Unaudited)			(Unaudited)
Shareholders’ equity
Preferred shares, comprising 48,666,627 shares outstanding		157,082						157,082
Common shares, comprising 25,212,555 shares outstanding		79,867			–			79,867
Treasury shares		(43,571	)		–			(43,571	)
Appropriated retained earnings		30,476			(1,189	)		29,287
Unappropriated retained earnings		66,750			–			66,750
Total Gafisa shareholders’ equity		290,604			(1,189	)		289,415
Non-controlling interests		197			–			197
Total shareholders’ equity		290,801			(1,189	)		289,612

	As originally reported						As restated
Net Income	2005			Restatement Adjustments			2005
	(Unaudited)			(Unaudited)			(Unaudited)
Net operating revenue(1)		439,011			(3,125	)		435,886
Operating costs (sales and services)(1)		(329,775	)		1,324			(328,451	)
Gross profit(1)		109,236			(1,801	)		107,435
Operating expenses
Selling, general and administrative		(70,914	)		–			(70,914	)
Other		(6,391	)		–			(6,314	)
Operating income		31,931			(1,801	)		30,130
Financial income (expenses		(17,684	)		–			(17,684	)
Income (loss) before income tax, equity in results and non-controlling interest		14,247			(1,801	)		12,446
Income tax expense (2)		(1,886	)		612			(1,274	)
Income (loss) before equity in results and non-controlling interests		12,361			(1,189	)		11,172
Equity in results		22,593			–			22,593
Net income (loss)		34,954			(1,189	)		33,765
Less: attributable to non-controlling interests (4)		(571	)		–			(571	)
Net income (loss) attributable to Gafisa		34,383			(1,189	)		33,194

(1)

Re:	Gafisa S.A. (“Gafisa” or the “Company”)
	Form 20-F for the Fiscal Year Ended December 31, 2009
	Filed on March 10, 2010

1 – Cash and Cash Equivalents / Marketable Securities	A-3
2 – Revenue Recognition	A-4